Acclaimed money manager Stephen Leeb told King World News there is outright panic and liquidation now taking place. Leep also stated that the Chinese are going to get extremely aggressive in the physical gold markets because they believe the current price is way too cheap.
June 24, 2013
King World News
On the heels of continued chaos in global markets, today acclaimed money manager Stephen Leeb told King World News there is outright panic and liquidation now taking place. Leeb also told KWN the Chinese are going to get extremely aggressive in the physical gold market because they believe the price is way too cheap.
Leeb: “I’m trying to focus on the reasons for the collapse, not only in gold and silver, but most of the stock markets across the globe. A lot of investors read Bernanke’s comments about ending QE, if certain economic conditions were achieved, as a reason to liquidate.
Investors firmly believe that the end of QE is like cutting the floor out from underneath the stock market. At the same time, China has decided to curb a lot of bad investments in their economy....
“There is hell to pay right now, but in the long-run I think this will be very good for China.
So when you combine what just happened with Bernanke and what is taking place in China, it has created a massive liquidation in global markets. People read China is imploding and Bernanke is going to taper back on QE and now you’ve got a full-fledged panic going on.
In this environment gold stocks have been absolutely destroyed. What we are seeing in that sector is total capitulation. But gold is now starting to hold up better than bonds and stocks. This is a sign that people aren’t fleeing into the US dollar necessarily, but into things they believe will hold value longer-term, and right now one of those assets is gold.
China has so far been content to buy the dips in gold, but I believe that China will get much more aggressive in the gold market now. And as for the Chinese people, what are they going to turn to? A Chinese market that is plunging? No, like the Chinese government, they are turning to gold.
China is sitting with over $3 trillion of reserves and they are going to put some of that money to work more aggressively in gold. So I wouldn’t be surprised to see gold rally here. I firmly believe the Chinese government now believes the price of gold is way too low and they will buy gold all the way up to and through the $1,400 to $1,500 levels. I wouldn’t be surprised to see that happen in the next 6 to 8 weeks.
So this is not the time to lose faith in gold. You can lose faith in governments, stocks, bonds, but do not lose faith in gold. But the world is changing and it is definitely heading for a gold standard. I think the kind of volatility you are seeing now suggests that it will happen sooner rather than later. Probably within the next 2 to 3 years you will see a gold standard. So I still think we will see gold and silver prices 10 to 15 times higher than they are today.
Right now people are going through so much pain, but this is the exact time to seek a safe harbor by owning physical gold and physical silver.”
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